The Five Books That Will Make You An Investing Leviathan In 2019
You will find a consistent characteristic among the world’s most successful investors: they all read, a lot. This list contains a plethora of knowledge from the best minds in investing and personal finance. My advice to you is to start at one end, absorb the wisdom in every page and demolish this list in its entirety. I can promise that in these pages are crucial pieces of the roadmap to financial freedom, and if you live by them, you will be successful.
Ben Graham has been heralded as ‘The Father of Value
Investing’ and in this book he details his investing strategy, which has been
utilised by many investing heavyweights (and most of the other authors on this list.)
Warren Buffett called this book “by far the best investing book ever written”
- and if that doesn't convince you to read it, nothing will.
This was the first book I read on investing and it has shaped my strategy more than any other. The principals this book teaches are akin to the experience of reading it; you must have patience, attention to detail, perseverance and the ability to stay in for the long haul!
The lessons, though hard fought to obtain are all the more precious for the effort and not so easily forgotten. The latest edition has a section written to modernise and summarise each preceding chapter, which is enormously helpful even if it does feel somewhat like cheating!
You cannot be a true value investor without these pages in your brain; they are vital and will serve you well for years to come. If you have come here for knowledge then look no further! You may return to the rest of this list once this book has been defeated (and if you're really struggling then just read chapters 3, 8 and 20; these are gold dust).
It seems only fair that number two on our list should come from The Oracle of Omaha, Ben Graham’s apprentice and the greatest investor in modern memory: Warren Buffett. If you want to learn about the man himself and how he became the wealth building juggernaut he is today, The Snowball is a balanced, thorough and enjoyable biography written by Alice Schroeder who was given rare permission to speak to Warren, his family and closest friends.
I am a huge fan of Buffett as a person and of his story, and I found a great deal of wisdom in this book. This account is less biased and better written than a few of the other Buffett books (e.g. Tap Dancing To Work and Buffett: The Making of an American Capitalist .) However, if you want to learn about his investing strategies only, you can find more incite by reading his annual letters to the Berkshire Hathaway shareholders here:
http://berkshirehathaway.com/letters/letters.html
They really are a goldmine but they are quite heavy and exclusively business focussed. My advice would be to save these for a little further down the road if you are just starting out.
The Snowball will give you a dream and a real life example of what can be achieved in the world of investing. Better yet, it is a story of thinking yourself rich. No lucky lottery ticket, no inheritance, just a brilliant person following his strategy with discipline. It lit a flame in my belly and trust me, once that flame is lit it is impossible to extinguish!
I loved this book and would recommend it to novices and experts alike. Dhandho means business, in more ways than one. His stories of a Gujarati family trying to achieve the American Dream are inspiring and I was hooked from the first chapter.
Pabrai’s investment strategy is based upon risk and avoiding it at all costs. He bets infrequently, but when he does he makes sure it’s the right investment and then bets big. This strategy has served him very well while managing The Pabrai Investment fund, which has delivered 28% annualised returns to investors since 1999.
This book helped me to spot companies that are worth betting big on, he lays the foundations for investors to seek out good, reliable companies in stable markets with very little risk attached. Pabrai has a similar strategy to Buffett and in The Dhandho Investor we get real life examples of how value investing has been utilised over the last 20 years.
Unlike the first two, this book is an easy read and can be completed in a couple of sittings. I firmly believe it will be looked on as a classic in years to come.
“Read this book carefully and the financial services industry will have one fewer easy victim, but you will have a sound base for a lifetime of successful investment.” - Chair of the UK Shareholder's Association, Martin White.
This is a slightly different recommendation; one that might not light the flame inside you but that means you won’t immediately set yourself on fire. This book teaches you to walk so that you can run later on.
The FT Guides are consistently excellent, reliable sources of material and advice for investors. This book gives an extensive introduction into the stock market in an easily digestible manner. It will provide answers to questions that you will need to understand before taking the leap into the stock market. For example, if you don’t know what dividends are, how to decipher a P/E ratio or where to find a company’s annual reports, this book should be your first port of call.
I bought this book as a birthday present for co-Start Investing investor Matt a few years ago. It has been very well thumbed since then and we have found having all the information in the same place and in the same format has made understanding the concepts much easier than say, using Google for every little query we come across. Furthermore, it gives a completely unbiased, unromantic view of the stock market so you can decide freely how you want to approach your investments.
Philip A. Fisher’s philosophies on investing are so widely praised that today his works are almost biblical. Buffett, Munger, Lynch are all advocates of Fisher’s and countless millions have been made through his techniques.
Personally I found this easier to understand than the equally highly praised Securities Analysis by Graham. Both investors have similar techniques when it comes to strategy but Fisher looks at companies from a different angle in Common Stocks and Uncommon Profits . After reading The Intelligent Investor your mind will be full of ratios and numbers, Fisher adds the creamy qualitative filling to Graham's toasted numbers bagel. He discusses the characteristics that make good business in terms of product, management, strategic marketing, financial skill and, most importantly, the people .
He has a brilliant 15-point checklist for stock selection that can be utilised today, although if you find one that fits all 15 in today’s market please let me know!
Probably not the book I would start with as a brand new investor, but for people who have read a few others on this list and enjoyed them, Fisher provides very valuable incite into a more personnel and management focussed investment strategy.
Thank you so much for reading!
Please feel free to comment below with your favourite investing books.
Joe
